Question
Sandhill, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its
Sandhill, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $23,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project.Sandhillwill recover these changes in working capital at the end of the project10years later. Assume the appropriate discount rate is8percent. What are the present values of the relevant investment cash flows?(Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.25.)
Present value
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